Reverse Mortgage Philadelphia: Philly’s elderly are turning to reverse equity loans offered through lenders such as Wells Fargo in mass. With property taxes going through the roof many seniors can no longer maintain their standard of living.
Seniors in the Greater Philadelphia area can call 610-717-2879 to reach a Reverse Mortgage Specialist for a free consultation. Here’s helpful advice for seniors considering a Home Equity Conversion Mortgage or HECM for short.Watch the video instead.
What is a reverse mortgage
- It’s a home loan that enables you to convert a portion of your home equity into tax-free funds without having to sell your home, give up title, or take on a new monthly payment. (Consult a tax adviser)
- Instead of making monthly mortgage payments, your mortgage pays you. That’s the “reverse” part of a reverse mortgage.
How a reverse differs from a traditional mortgage
- With a traditional mortgage or home equity loan -
- Homeowners qualify based on their credit history and debt-to-income ratio. They borrow money which requires making monthly payments.
- With a reverse mortgage–
- Your mortgage makes payments to you and there are no income, employment or credit score qualifying restrictions.
Why get a reverse mortgage
- A reverse mortgage can give you access to your home’s equity without the burden of monthly payments
- Reverse mortgage proceeds may be used for
- any purpose, including:
- Eliminating your existing mortgage
- Meeting daily or monthly expenses
- Covering healthcare expenses
- Remodeling or home repairs
- Reducing credit card debt
- With the reverse mortgage for purchase feature, the loan proceeds are used to help purchase a new primary residence better suited to your needs
How the loan proceeds are disbursed
- You have several options to receive your reverse mortgage proceeds, they are available to you in the following distribution options:
- Lump Sum — A specific amount is made immediately available (often used to pay off an existing mortgage).
- Term — Funds are released in fixed monthly amounts for a set period requested by the customer.
- Tenure — Funds are distributed in equal monthly allotments for as long as at least one homeowner continues to occupy the home as a principal residence.
- Line Of Credit — Funds remain available for the customer to draw on as needed or in automatic monthly disbursements.
- Combination — You can choose any combination of lump sum, monthly or line of credit disbursements. You can even receive an initial lump sum and put the rest in a line of credit. Regardless of how you choose to receive your proceeds, you can adjust your plan as often as you wish to accommodate changing needs.
Three essential facts
- As long as all program requirements are met:
- You retain the title to the property and continue to own your home.
- Instead of making mortgage payments, you can have a mortgage that pays you.
- You cannot owe more than the value of the home.
- Program requirements include but are not limited to:
- One of the borrowers continuing to live in the house
- Keeping the taxes and insurance current
- Maintaining the property according to FHA standards
- If the program requirements are no longer being met and you or your heirs choose to retain ownership of the home, the full outstanding loan balance must be paid.
Age and eligibility requirements
- You and any co-owners must be at least 62 years old
- Your home must be your primary residence
- You must own your home free and clear, or the existing mortgage must be paid off with the loan proceeds
- Educational counseling with a HUD-approved counselor is required
How much can I borrow
- The amount that can be borrowed is determined by a HUD formula that is based on the following factors:
- The age of the youngest
- homeowner
- The appraised valueof the home
- The current interest rate
- The established lending limit
Call TODAY – 610-717-2879
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